While beacons were the hot topic in 2015, with big retailers such as Tesco and Waitrose deciding to pilot the technology, the hype surrounding them has since been questioned. Beacons hold great promise for the advertising market and their full potential is yet to be discovered, but they have so far failed to hit the ROI mark in the world of reward programmes.

Why? The ultimate goal of any reward programme is to retain customers and drive bottom line results. In order to do that, it needs to be cost-effective, as well as relevant and comfortable to the consumer. App and beacon powered reward programmes have not yet managed to achieve this.

1. The use of beacons is conditioned on Bluetooth connectivity and a pre-downloaded app

Beacons are wireless devices that transmit Bluetooth Low Energy signals to nearby smartphones and tablets. These signals can open a relevant app on a shopper’s phone, even when the app is not running in the background, and trigger location-based actions and features, such as targeted coupons or offers. This sounds great in theory, but there are two conditions for it to happen in practice: shoppers have to have a corresponding app installed on their smartphones and their Bluetooth connectivity must be on while in store.

The reason why this is problematic is twofold. Many users don’t have their Bluetooth switched on while shopping, and the average app loses almost its entire user base within a few months. Research has shown that apps lose 77% of their Daily Active Users within the first 3 days and 90% of mobile apps are deleted within 30 days of being installed.

This means that the user base of this channel is limited, significantly restricting the reach of a beacon-powered reward programme. On the other hand, the reach of app-less reward experiences is not conditioned on anything except the will of the shopper.

2. Beacons can’t deliver robust analytics

Analytics are a crucial source for measuring the effectiveness and reach of reward programmes, as well as for creating intelligent targeting and personalisation. The problem with beacons is that they are still not able to be a key source of analytics.

Their so far low adoption numbers mean that retailers cannot capture a large enough percentage of the visitors for robust analytics. Additionally, the existing beacon analytics are not so accurate – the technology is built on a lighthouse model, meaning that their signal goes around the store and gathers information only from the users it catches, missing many others.

3. The cost-benefit analysis of apps and beacons doesn’t stand up

Beacons are a pricey technology, while developing a high quality app requires a lot of time and investment. Taking into consideration the limited app adoption and Bluetooth connectivity of consumers, it becomes questionable whether investing in these technologies to power a reward programme makes sense.

4. In-store tracking is unpopular among consumers

Shoppers don’t want their every move tracked. 80% of US consumers find it unacceptable to be tracked via their smartphones in store, while half of US smartphone users don’t want anything to do with retailers’ beacons or in-store tracking. In other words, shoppers don’t want to feel stalked.

5. Consumers are worried about privacy when tracked without permission

Privacy concerns were cited by 51% of US smartphone owners as a reason why they are not interested in receiving benefits via mobile tracking, while 67% of consumers stated that tracking feels like spying.

The need for transparency is growing. Retailers need to show customers why giving up some of their data is worthwhile, and shoppers want to be able to opt in or out, and choose whether they want to share their personal information, instead of being monitored without consent.

6. Push messaging can be intrusive and scary

Customers have reported that getting an offer for an item they’re looking at can be creepy. Being flooded with unwanted notifications can cause consumers to feel anxious because push messaging is just that – pushy. It invades people’s devices, their space, and their time.

7. Shoppers want to opt-in and choose their rewards

64% of consumers believe that the “opt in” approach is the way to go. A shopper wants to be an active participant in their reward experience, and not just someone bombarded with messages against their will.

App-less solutions with no push messaging are less invasive and show more respect for the consumer as a person with a power of choice. A reward experience engages consumers in a more productive way where shoppers get to choose the offers they want, when they want them.

8. Consumers prefer app-less reward programmes

Research has shown that 89% of customers would rather receive rewards through SMS than by using an app. This is why going app-less make sense. Retailers should aim to have as few obstacles to purchase path as possible. No one today asks for more clutter. On the contrary, we all want simplicity

9. Immersive visual experiences engage consumers emotionally

Going app-less doesn’t have to mean going tech-free. Technology surrounds us – so much that shoppers expect not only to see digital solutions everywhere, but also to interact with them. In fact, 74% of consumers would interact with touchscreens for relevant offers. Retailers need to embrace this and provide consumers with reward experiences powered by interactive technology in-store.

Beacons represent a huge potential for the advertising market, but they haven’t yet been refined for the purposes of an effective reward programme. This is why Streetlike’s reward experience solution relies on touchscreen digital signage and doesn’t require shoppers to install an app or have their Bluetooth switched on.

Touchscreens are installed in-store, offering shoppers to choose personalisable pre-purchase offers that they can claim by entering their mobile number, without downloading an app. This induces purchase in-store, increasing participation rates and hence the ROI of reward programmes. The technology also captures customer data in a way that is not invasive, all the while creating an engaging in-store customer experience.